"The Multiplier Effect" (Congress, wage, Senate, pay)

[lycos679]

Originally Posted by pnwmdk

Defending the concept, because one tiny slice of a massive amount of it won't change your taxes... Is being dishonest.

There was no dishonesty in my statement. Yours on the other hand... You claimed that issuing food stamps is taking from someone else that might have put that money to better use, but no "taking" is occurring in the manner that you describe.The only way for your argument to hold water is if somone proposes rasing taxes so that we can issue more food stamps and that has not happened.

Originally Posted by pnwmdk

I don't care if you call it "food stamps" "TARP" "obamcare" or any other stupid spending program.

You should. You are the one that claimed that no multiplier effect exists within economics.

Originally Posted by pnwmdk

Saying that one particular use of confiscated money is so good you should do it massively is all the same problem. It isn't true. If the concept doesn't work for hiring 30 million people to dig ditches and 30 million to fill them back up, it doesn't work for anything else, either.

Redundant ditch diggers won't add value to an economy. Food stamps are injected into the bottom of the economy and work their way up the chain. The store hires a cashier and a clerk, the store orders more, the trucker delivers more and buys more gas, the gas station hires more clerks, the farmers hire more farm hands. Each one of the people in the chain has housing, clothing, and other material items, that when purchased, contribute to the economy.

[pnwmdk]

Originally Posted by Hoonose

Even producer are consumers.

Uhhh... Sigh. Now you're playing silly games.

Most economies are built on consumption.

Which is why globally, we're in a monumental heap of trouble. Debt and high taxes and ever rising levels of economic crisis with NO visible end in sight and NOTHING fundamentally changing.

Right now China has a central command economy based on production.

And it isn't working. There are no successful planned economies. China is exploiting cheap labor to divert MONEY in their direction. China produces little wealth. It makes cheap, valueless commodities that other economies consume. Perhaps you're unaware that China has massive debt problem that's growing exponentially.

Most all of which was mandated and created via central policy and new money creation. Without the US as their consumers they would not have had the opportunity to move up from their rural 3rd world station. They are able to improve now because we the consumers created a reason for their business. China will now evolve over the next generation into a more consumer oriented society as we did last century. This will happen because their consumers will demand it.

I'm sorry, you have no idea what you're talking about.

China cannot and will not have any fundamental change until capitalism is actually allowed - that being the unhindered ownership and employment of anything. This includes knowledge and assets. China does not respect either one, which is why the average Chinese individual annual production of wealth is microscopic. This will not fundamentally change until true individual freedom happens, which includes property rights.

We have high unemployment here and now because of the continued search for profits with typical capitalism. It is simply cheaper to produce abroad. And another reason is because of manufacturing efficiencies from technological advances allow industry to produce more while using fewer workers.

Nobody would be better off if we made it all here, but it cost 4 times as much.

The real issue is not that the Luddites lost the battle. The real issue is that our government costs us, collectively, about 5.5 TRILLION dollars per year. That's about 1/4 of our entire GDP. It's enough to make every unemployed person VERY well off.

Sorry, the notion of redistribution and improved life by political control... Is an absurdly laughable failure.

But despite this the USA remains a huge manufacturing and production powerhouse in the world.

Not one iota of it due to government involvement, rather "in spite of".

[pknopp]

Originally Posted by Hoonose

I won't say total nonsense as too many believe this and as such muddles the answer.

We recently had an economic disaster that was private debt based, not Federal.

No it was both and if you disagree with what I said, take that position.

And this is where we need to pay attention and be concerned. Proper oversight and regulation so that doesn't happen again.

We have done nothing to address that either.

Growing Federal Debt means a growing economy.

Christ.......others have been asked this over and over with no valid answers. If this was true why not just go 100 trillion in debt? We would then be swimming in prosperity right?

You have to have more money (debt) to grow. Otherwise we get deflation. More people, more business, more transactions in fact in a larger world, as the USD is the World's main reserve currency, means more debt. We rule the world with our debt. China is indebted to us much more than we to them!

Luckily for us right now they are but the reason we would have deflation is because the bubbles that created the earlier inflation popped. At some point that has to stop.

QE has only reinflated the bubbles.

[pnwmdk]

Originally Posted by Hoonose

I won't say total nonsense as too many believe this and as such muddles the answer.

We recently had an economic disaster that was private debt based, not Federal. And this is where we need to pay attention and be concerned. Proper oversight and regulation so that doesn't happen again.

No, it was all federally based.

It was government institutions that spawned all of this.

[dsjj251]

Originally Posted by Mircea

Not in this universe.

A cow produces only so many gallons of milk per month, and no more, no matter how hard close your eyes, cross your fingers and click the heels of your ruby slippers.

No doubt, you don't have a cow. I do.

Mircea

That has nothing to do with what was said in the original comment. the OP mentioned nothing about the milk before it is distributed or if it is ever harvested in the first place before the government pays for it.

look before you leap next time.

[dsjj251]

Originally Posted by pghquest

How does the cow produce more because its owned by the government and not a person?

If you do not have a distributor before the government buys your cow, you simply dont milk the cow. The milk is then never produced.

Seriously, what is going on with this site, are people just deliberately making bad arguments or are we all just misunderstanding each other that much ?

[pnwmdk]

Originally Posted by lycos679

There was no dishonesty in my statement. Yours on the other hand... You claimed that issuing food stamps is taking from someone else that might have put that money to better use, but no "taking" is occurring in the manner that you describe.The only way for your argument to hold water is if somone proposes rasing taxes so that we can issue more food stamps and that has not happened.

LOL, you're just so transparently dishonest.

Your claim is that since politicians set tax rates, that spending (and borrowing) cannot be labeled as "taking from one group to give to another" since a specific spending program does not have a directly labeled tax assessed solely as a means to fund it.

This kind of "distinction without a difference" type argument may work, but it doesn't have a ring of truth. The fact is, money comes from the taxpayer and is spent. If the ONLY redistributive thing government did was the food stamp program, claims it benefits the economy would be just as absurd.

It doesn't matter if the accounting of the federal government - and the budgeting process and tax policy - are insanely stupid - is obscure or not. The same thing still happens.

What's more, what I love, is that your argument invalidates itself. While I make a perfectly coherent and reasoned argument about the CONCEPT, you're arguing about accounting, and claiming that the obscurity of mass taxation and budgeting makes accounting impossible... while claiming that impossibility proves you right about your analysis.

You should. You are the one that claimed that no multiplier effect exists within economics.

Because it doesn't exist. Government spending on consumption has no "multiplier effect". It is absolutely impossible to make this claim with credibility.

You completely discount the LOSS FACTOR for the money being taken from consumers and investors while pretending any measurable movement of money is a net benefit. That kind of math is sheer insanity.

Redundant ditch diggers won't add value to an economy. Food stamps are injected into the bottom of the economy and work their way up the chain. The store hires a cashier and a clerk, the store orders more, the trucker delivers more and buys more gas, the gas station hires more clerks, the farmers hire more farm hands. Each one of the people in the chain has housing, clothing, and other material items, that when purchased, contribute to the economy.

Neither do food stamps.

Both simply transfer cash flow from one place to another. Harm this, help that, with a net loss. It cannot possibly be called a "benefit".

[Hoonose]

Originally Posted by pnwmdk

No, it is not.

Tell HOW you think it's going to work different.

Here's how debt works:

Entity A borrows money.

Entity B lent it to them.

Entitity A must use what they borrowed to produce more so they can repay B.

If Entity A refuses to repay or cannot, entity B confiscates whatever A pledged as security.

If there is no security and A cannot repay B, B then has a loss, and not only won't lend to A, loses ability to lend to A.

So, tell me, in this scenario, how does A (US Gov) borrow money, never repay, and never default, and the taxpayers not get their paychecks (security pledged for debt) confiscated?

Please, explain it to me. Use a straightforward cash flow and consequences / actions narration.

Not a single one of those theories works. Because reality does not bend to theory.

It's different when the entity is the money creator.
Money creators don't need to borrow in their own currencies. This is no theory.
We owe not one red RMB to China!

Any monetarily sovereign nation simply creates its own debt/money. In the US by law we need to create the actual Treasuries. But many renowned minds have suggested we simply create the spendable money directly. e.g. Lincoln, Henry Ford, Edison.

The only way a monetarily sovereign entity can renege on the repayment of any amount of debt denominated its own currency would be by political tomfoolery. i.e. the annual debt ceiling charade.

[pnwmdk]

Originally Posted by dsjj251

That has nothing to do with what was said in the original comment. the OP mentioned nothing about the milk before it is distributed or if it is ever harvested in the first place before the government pays for it.

look before you leap next time.

Like I said. It is assumed, for purposes of dishonest argument - that private ownership is always unproductive, and that public ownership creates productivity.

Really, there's only one reason to own cows. To produce food. Whether it's meat or milk.

Of course, nobody actually BELIEVED that I meant that the government took away the cow, bred it, and hired the former owner to milk it SOLELY BECAUSE THE OWNER REFUSED TO.

When you've been caught saying something amazingly stupid, don't try to deflect by calling someone else stupid... with argument even more stupid than the assumption you're arguing from.

[pnwmdk]

Originally Posted by Hoonose

It's different when the entity is the money creator.
Money creators don't need to borrow in their own currencies. This is no theory.
We owe not one red RMB to China!

Any monetarily sovereign nation simply creates its own debt/money. In the US by law we need to create the actual Treasuries. But many renowned minds have suggested we simply create the spendable money directly. e.g. Lincoln, Henry Ford, Edison.

The only way a monetarily sovereign entity can renege on the repayment of any amount of debt denominated its own currency would be by political tomfoolery. i.e. the annual debt ceiling charade.

I said you could not explain it.

Why don't you try, without blather about "sovereign entities" and just explain what it is you do.

Again, I want to know how the Treasury department pays the notes it owes and interest on them without eventually defaulting because the interest exceeds all the taxes that can be raised.

Just explain it.